Altair Concentrated Portfolio Issue date: 9 May 2017

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1 Altair Concentrated Portfolio Issue date: 9 May 2017 About this Managed Portfolio Disclosure Document This Managed Portfolio Disclosure Document (Disclosure Document) has been prepared and issued by Diversa Trustees Limited (ABN , AFSL , RSE Licence No. L ) (Trustee, we, us) as Trustee of the HUB24 Super Fund (ABN , RSE R ) (Fund). The information contained in this Disclosure Document is incorporated by reference into the Product Disclosure Statement Part I and Part II (PDS) for the Fund and should be read in conjunction with the PDS, Additional Information Booklet, Investment Booklet, individual insurance policies (as applicable) and the relevant underlying disclosure documents (if any) for each investment option. This Disclosure Document is intended only for the purpose of providing an overview of the key features of the managed portfolio available through the Fund. The information contained in this Disclosure Document is not intended to be a definitive statement nor an endorsement that this managed portfolio is appropriate for you, and should not be solely relied upon in making a decision to invest. All dollar amounts are in Australian dollars unless otherwise indicated. All fees include GST (where applicable) unless otherwise specified. Information in this document is subject to change from time to time. Other fees and costs apply. To understand all the fees payable when you select a particular investment option, you must refer to the PDS (including the information incorporated into the PDS) and the product disclosure statement (or other disclosure document) for the investment option. Refer to Part II of the PDS and, if applicable, the disclosure document for the particular investment option(s) for details. This managed portfolio is comprised of a number of underlying financial products. By selecting this managed portfolio, you instruct the Administrator to purchase on your behalf the underlying financial products that make up the managed portfolio. Any statement made by a third party or based on a statement made by a third party in this Disclosure Document has been included in the form and context in which it appears with the consent of the third party, which has not been withdrawn as at the date of this Disclosure Document. General Advice Warning The information in this Disclosure Document is general information only and does not take into account your personal objectives, financial situation, needs or circumstances. Before acting on this information, you should consider its appropriateness, having regard to your personal objectives, financial situation, needs and circumstances. Before making an investment decision about the product, including about whether to acquire or continue to hold the Altair Concentrated Portfolio, you should consider the PDS (including incorporated information). These documents are available free of charge by contacting your financial adviser or the Administrator or through the product website shown in the front cover of the PDS. When designing the portfolio, the portfolio manager does not take into account any potential investor's investment objectives, financial situation or needs. You should also consider the product disclosure document (or other disclosure document) for any underlying investment acquired under this managed portfolio before making any investment decision. Upon request, your financial adviser must give you (free of charge) a copy of this documentation. If you d like to request a free printed copy of this Disclosure Document or have any questions or would like any more information about the Fund or the Altair Concentrated Portfolio, please contact your financial adviser or HUB24 Custodial Services Limited (ABN , AFSL ) (HUB24, Administrator). Eligibility You can only invest in the Fund if you are advised by a financial adviser (adviser), unless otherwise approved by us, so you can receive financial advice for each investment you are considering, including investments held through the managed portfolio described in this Disclosure Document. 1

2 Managed portfolio Portfolio manager Execution of investment strategy Code Altair Concentrated Portfolio The portfolio manager is Altair Assets Ltd, trading as Altair Asset Management ('Altair') (ABN , AFSL ). The portfolio manager is responsible for designing and managing the composition of this managed portfolio to meet the investment objectives and investment strategy detailed below. HUB24 has been appointed by the Trustee to provide various services in relation to the Fund, including promoter, administration, investment management and custody services. HUB24 is responsible for implementing the investment instructions of the portfolio manager by buying and selling shares, taking into consideration timing, trading costs (such as brokerage and currency costs, if applicable) and the mandate of the portfolio. HUB24 has the right to vary the managed portfolio, as set out in the Additional Information Booklet. By investing in this managed portfolio, you instruct HUB24 to buy and sell on your behalf the underlying financial products that make up the managed portfolio as advised by the portfolio manager AAL001 Inception date 25/03/2014 Minimum initial investment amount Holding limits Designed for Investment objective 1 Investment strategy Investment universe Benchmark No minimum Up to 100% of your account For more information refer to Investment Holding Limits in the Investment Booklet. The Altair Concentrated Portfolio is designed for investors who are primarily seeking capital growth from a portfolio of Australian shares and are prepared to take on higher levels of risk. The Altair Concentrated Portfolio s investment objectives are to: - outperform the S&P/ASX 200 (TR) over rolling three year periods before fees; and - provide capital growth over the medium-to-long term. The Altair Concentrated Portfolio is an actively managed concentrated portfolio. The portfolio is managed in line with Altair s core investment philosophy, which is based on understanding the drivers and impact of change. Altair s investment process assesses these change factors, as well as conducting detailed analysis of companies financial health, prospects and valuation metrics. With these best ideas Altair then produces a risk-controlled portfolio of stocks. Refer to the 'Investment strategy and process' section below for further details. ASX-listed securities Cash The portfolio does not invest in derivatives. S&P/ASX 200 (TR) 1 The investment objective is expressed before the deduction of investment management fees and tax. 2

3 Asset allocation ranges Minimum Maximum Australian shares 90% 100% Cash 0% 10% Portfolio income All income derived from this portfolio will be retained in the portfolio. Typical number of securities 15 to 35 stocks Turnover aim The portfolio does not have a specific turnover aim. Actual turnover for the portfolio will vary depending on market conditions and opportunities. Minimum suggested timeframe 5 years Risk level (Standard Risk Measure) High. The estimated likelihood of a negative annual return is 4-6 years in 20 years. The Standard Risk Measure is a way of describing the level of risk of different investment options and provides a guide on the expected number of negative annual returns over any 20-year period. It does not consider all form of investment risk. Please refer to the Investment Booklet for more information about the Standard Risk Measure. Investment fee - Investment management fee - Investment performance fee 0.88% p.a.inclusive of GST of the balance in the managed portfolio. The investment management fee is calculated as a percentage of the managed portfolio calculated daily and deducted from your cash account monthly in arrears. The investment management fee is paid to the Administrator and used to remunerate the portfolio manager for its services in relation to the Fund, and to meet the costs of the asset consulting and the investment management services associated with the portfolio % of outperformance above the S&P/ASX 200 (TR). The investment performance fee is deducted from your cash account monthly in arrears. The estimated performance fee is 0.38% p.a. 2 2 This estimated performance fee is annualised and based on the outperformance of the portfolio against its benchmark between 25 March 2014 (portfolio inception date) and 30 June 2016 using the calculation method set out in the Performance fees section of this document. Importantly, performance is not guaranteed and a performance fee is not always payable. 3

4 Other fees and costs In addition to the Investment fee described above, there may be other fees and costs relating to the underlying investments that make up the managed portfolio, including, but not limited to, a cash management rate 3 and transaction fees. For more information refer to Part II of the Super PDS and, if applicable, the product disclosure document (or other disclosure document) for any underlying investments acquired under this managed portfolio. 3 A cash management rate will apply to the cash account portion you hold in this managed portfolio. The cash management rate is the amount that the Administrator earns from its cash management activities and is not a separate fee payable by you. Refer to Part II of the Super PDS for more information. 4

5 About the portfolio manager Altair Assets Ltd Altair Assets Ltd, trading as Altair Asset Management (ABN ; AFSL ) ( Altair ) is the portfolio manager in relation to the establishment and implementation of the Altair Concentrated Portfolio. Altair is a high conviction, active Australian equities manager. Altair provides asset management services through managed funds or individual portfolio services. Altair s products are tailored to the needs of individuals, self-managed super funds, family offices, wholesale clients, charities and institutional investors. Altair is the evolution of the private client wealth management business, Parker Asset Management, which was established in With a heritage in private wealth management, Altair understands the importance of providing value-add solutions to build long term wealth for clients. Investment strategy and process Investment philosophy Altair s investment philosophy is based on understanding the drivers and impact of change. Its ability to recognise the nature, timing and impact of change underpins Altair s competitive advantage. Altair applies macro thematic research to uncover trends which are most likely to influence company performance, and seeks to invest in companies that display innovation, adaptability and sustainable competitive advantage in a changing world. Investment strategy The portfolio primarily invests in shares within the S&P/ASX 200 Index. The portfolio is managed in line with Altair s core investment philosophy, which is based on understanding the drivers and impact of change. Altair s investment process assesses these change factors, as well as conducting detailed analysis of companies financial health, prospects and valuation metrics. With these best ideas Altair then produces a risk-controlled portfolio of stocks. The portfolio is concentrated, which means it holds a small number of shares, ranging between 15 and 35. The portfolio will invest in undervalued stocks that possess capital growth opportunities by focusing on companies that are advantaged by economic, technology and capital markets developments. The companies may display these attributes: - favourable industry exposure - sustainable competitive advantages - well-managed operationally and financially. Derivative instruments will not be used within this managed portfolio. How the portfolio manager manages risk? The portfolio manager is unable to eliminate all investment risks, but does analyse, research, manage and aim to reduce the impact of risks on investments by actively monitoring investment markets and the portfolio and use carefully considered investment and risk management guidelines. Labour standards and environmental, social and ethical considerations The Trustee does not take into account labour standards, environmental, social or ethical considerations when making the investments available The portfolio manager considers labour, environmental, social and ethical standards as part of their investment decision making process should they become aware of any considerations that will financially affect an investment decision. The portfolio manager has no predetermined view in relation to labour standards or environmental, social or ethical considerations, however, is aware that these issues can influence social, business and investor outcomes and considers these issues when making an investment decision. The portfolio manager s consideration of labour, environmental, social and ethical considerations is in its own right and not on behalf of the Trustee. Risks Before you consider investing in this portfolio, it s important you understand the risks that can affect your investments. A summary of key risks is in the PDS. See the Risks section in the PDS. Please note this is not an exhaustive list of all the risks. The risks relevant to this portfolio reflect the underlying investments. For 5

6 information about risks with regard to your personal situation speak to your adviser. Performance fees Investment performance fee Some portfolio managers may charge an investment performance fee in addition to the investment management fee. Investment performance fees relate to the outperformance of the managed portfolio in relation to the benchmark and will be paid to the portfolio manager by the Trustee. Please read below for more information about the way the investment performance fee is calculated and deducted from your account. Benchmark Each portfolio manager sets a benchmark for the managed portfolio so that investment performance of the managed portfolio can be measured in relation to this benchmark. For example, the S&P/ASX 200 may be a benchmark for an Australian shares portfolio. HUB24 obtains data on these benchmarks from Standard and Poor s including performance data, and HUB24 uses this to determine the managed portfolio benchmark return percentage each day. HUB24 calculates the managed portfolio's performance by measuring the daily returns on a notional portfolio invested in accordance with the portfolio manager s instructions (i.e. in the securities that make up the managed portfolio using the weights as advised by the portfolio manager). This identifies the value added (defined below) by the portfolio manager compared to the portfolio's benchmark, without being distorted by the timing of contributions and withdrawals, and the timing and settlement of trades, all of which can vary for each investor. In this manner the same value added percentage (defined below) is charged to each investor in a particular managed portfolio. The percentage return each day is termed the managed portfolio return percentage. Note: If the portfolio manager elects to either reinvest dividends or distribute income, such election has no effect on the investment performance fee calculation. The managed portfolio weights can move from the original set of weights due to price movements, the addition or removal of investments and (possibly) other corporate actions this is referred to as a floating managed portfolio. Calculation method The investment performance fee is calculated as a set percentage applied to the value added by the portfolio manager, so the higher the value added the higher the investment performance fee as the portfolio manager shares the outperformance with the investor. The fee calculated monthly in arrears and is deducted from your cash account at the end of each month (or on prior to full withdrawal from the managed portfolio), and paid to the portfolio manager. The term 'value added' is a dollar amount and is defined as value added percentage multiplied by your managed portfolio value, where the 'value added percentage' equals managed portfolio return percentage less the managed portfolio benchmark return percentage for that day. Performance is calculated for the managed portfolio and the benchmark in exactly the same way to identify the value added percentage. The value added dollar amount is accumulated daily so that at the end of a given month, if the cumulative value added is greater than $0 then an investment performance fee is payable on the cumulative value added amount multipled by the manager s performance fee percentage, at which time the cumulative value added is set to $0. If the cumulative value added is less than $0 then an investment performance fee is not payable and the cumulative underperformance amount carries forward to the next month and must be made up before any outperformance fee can be charged. Example If at the end of the previous month the cumulative outperformance was negative or -$1,000 (i.e. a cumulative underperformance) and this month s outperformance is $1,500 then the cumulative outperformance is $500. If the portfolio manager charged an investment performance fee percentage of 25% then $125 would be the investment performance fee for that month (i.e. 25% x $500 = $125). Say at the end of the previous month the cumulative outperformance was positive $1,000 and an investment performance fee was charged [of 25% x $1,000 = $250], then the cumulative outperformance is reset to $0. If this month s outperformance is $1,500 then the cumulative outperformance is $0 + $1,500 and another investment performance fee is due of $375 (i.e. 25% x $1,500 = $375). The performance of the portfolio manager s managed portfolio will usually differ to your actual managed portfolio for many reasons including: 6

7 - cashflows the timing of capital contributions into and out of your managed portfolio the portfolio manager s managed portfolio makes no allowance for capital contributions or withdrawals - your managed portfolio will not be identical to the portfolio manager s managed portfolio, and - (minor) rounding adjustments and minimum trade sizes the notional amount invested in the portfolio manager s managed portfolio is assumed to start at $10,000,000. Note: The examples above are illustrative only and are based on the factors stated in the relevant example. They should not be taken to provide a guarantee or estimate of the investment performance fee that may be applicable to you. Trade notifications HUB24 may send you an notifying you of a set of pending investment instructions if the portfolio manager is planning to perform a rebalance or reallocation on your investment. This is called a trade notification. The specific details of the investment instructions will be set out on InvestorHUB. You have a minimum of 24 hours from the time and date of the trade notification to cancel these pending investment instructions. If you do not respond or take any action in relation to the pending investment instructions, the portfolio manager will submit the investment instructions on or around am the next business day. If you opt out (i.e. do not consent) to the portfolio manager s proposed rebalancing or reallocation your investment in the managed portfolio will be withdrawn and be deposited into your cash account. If you cannot contact your adviser to cancel the pending investment instructions, you can give HUB24 verbal and/or written instructions directly, as long as the verbal and/or written instructions are received by HUB24 within the time frame mentioned above. The rebalance and reallocation of managed portfolios may occur regularly and you may receive a trade notification each time a rebalance or reallocation occurs. Note: The trade notification feature has been developed to provide transparency and the right to veto any pending investment instructions within the agreed timeframe with your adviser or HUB24. Universe of investments A managed portfolio can only be made up of asset classes and underlying assets and securities from the approved list of investments in the Fund. The portfolio manager will select from the approved list to construct this managed portfolio. The actual list of assets and securities acquired in all of the above asset categories will be set out in your Statement of Advice. By investing in this managed portfolio, you instruct HUB24 to buy and sell on your behalf the underlying financial products that make up the managed portfolio as advised by the portfolio manager. Contact details Administrator: HUB24 Custodial Services Limited Mail: GPO Box 529, Sydney NSW admin@hub24.com.au Phone: Fax: Trustee: Diversa Trustees Limited Mail: GPO Box 3001, Melbourne VIC 3001 Phone: (03)

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